TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Paul Joseph
SUBJECT: See Below DATE: September 23, 2026
Approved Date:
9/24/26
COUNCIL DISTRICT: Citywide
SUBJECT: Third Amendment with CFKAA Holdings, LLC for Tow Administrator Services
REASON FOR REPLACEMENT
This replacement memorandum adds language specifying the updated maximum total compensation amount within the recommendation.
RECOMMENDATION
Adopt a resolution authorizing the City Manager or her designee to negotiate and execute the Third Amendment to the Agreement with CFKAA Holdings, LLC., for tow administrator services to amend the terms of the Agreement to:
a) Include certain provisions related to the towing of vehicles to and from the Police Warehouse by officers in the Police Department; and
b) Increase the maximum total compensation by $150,000 for a new not to exceed amount of $4,363,076 for the remaining option terms, subject to the appropriation of funds.
SUMMARY AND OUTCOME
Approval of this action will enable the City to amend the current agreement for the cost of towing felony vehicles to and from the Police Warehouse by officers of the
Bureau of Investigation (BOI).
COUNCIL AGENDA: 9/29/26
FILE: 26-996
ITEM: 2.13
HONORABLE MAYOR AND CITY COUNCIL
September 22, 2026
Subject: Third Amendment with CFKAA Holdings, LLC for Tow Administrator Services
BACKGROUND
Previous agreements with CFKAA Holdings, LLC excluded coverage fees associated with towing felony-related vehicles (e.g., homicides, hit-and-runs, assaults, and gang incidents) to the Police Warehouse. Further, the costs to transfer these vehicles back to private tow yards for registered owner retrieval post-adjudication were also omitted. In this Third Amendment, the City has agreed to assume financial responsibility for these specific vehicle tows fees moving forward, subject to the appropriation of funds. In 2026 - 2027, the cost for these special tows is estimated at $150,000.
ANALYSIS
Under the Third Amendment with CFKAA Holdings, LLC (assigned by AutoReturn US, LLC) for recreational vehicle towing and disposal services, the Police Department will be allocated additional contractual capacity of $150,000. Based on the current rate of $335 per tow, this capacity will cover towing costs for roughly 223 vehicles to and from the Police Warehouse for investigative purposes through the end of the 2026–2027, as well as projected expenses for 2027–2028.
EVALUATION AND FOLLOW-UP
The rate increase for towing fees is typically announced in July by the California Highway Patrol (CHP) through the Towing Service Agreement. Therefore, adjustments to the agreement may be recommended in the future to accommodate this future rate increase.
FISCAL IMPACTS
The amendment to the agreement for towing fees for felony-related vehicles (e.g., homicides, hit-and-runs, assaults, and gang incidents) to the Police Warehouse, including costs to transfer these vehicles back to private tow yards for registered owner retrieval post-adjudication, is estimated to cost $150,000 through 2027-2028. To the extent feasible and based on actual towing activity, the Police Department will absorb the costs within its existing budget in 2026-2027; the additional ongoing cost will be considered as part of the 2027-2028 Base Budget development process.
BUDGET REFERENCE
The table below identifies the fund and appropriation to fund the amended contract recommended as part of this memorandum.
HONORABLE MAYOR AND CITY COUNCIL
September 22, 2026
Subject: Third Amendment with CFKAA Holdings, LLC for Tow Administrator Services
Fund
#
Appn.
#
Appropriation
Name
Total
Appropriation
Amount for
Contract
2026-2027 Proposed
Operating Budget
Page*
Last Budget Action
(Date, Ord. No.)
001 0502 Non-Personal /
Equipment
$27,755,340 $150,000 696 6/16/2026
31336
*The 2026-2027 Adopted Operating Budget was approved on June 9, 2026 and adopted on June 16, 2026 by the City Council.
COORDINATION
This memorandum was coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 29, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action.
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
Paul Joseph
Chief of Police
For questions, please contact Mimi-Cristien Nguyen, Senior Analyst, Police Department at [email protected].